Specialist, LTCi, DI, Annuities, Life, Designs In Life, LLC, Utah
Disclaimer: The following answer is not to be considered tax advice. Contact a qualified tax professional before making any financial decision.
Yes, long-term care premium payments may be tax deductible. It depends on the tax status of the individual or business entity filing an IRS tax report.
The IRS annually publishes the limits on the amount of premium that can be entered into the tax return and where to enter that amount for consideration of tax deductibility. For non-business consideration, that would currently be "Medical expenses" in Schedule A. If by adding the allowable portion of the LTCi premium to Medical expenses causes the total amount of medical expenses to exceed the threshold (formerly 7.5% of AGI, going forward 10% of AGI), then the amount beyond that threshold may be deductible. If not, then the allowable portion of the LTCi premium would not qualify for deduction.
For business consideration, the portion of the premium allowable for possible tax deductibility is usually reported on Schedule C. At the present time, only a C-corporation may have 100% of the LTCi premium considered for deductibility.
The allowable amounts of LTCi premium for tax deductible consideration are age-based. For insured-ages 40 and under, the published allowable amount of the LTCi premium for 2013 is $360. For those ages 71 and over, the published allowable amount of the LTCi premium for 2013 is $4550. Between that minimum and maximum are various age brackets with different allowable amounts. Those amounts will be adjusted for income-tax-year 2014 and each year thereafter, under current tax law. Tax preparers, accountants, tax attorneys, and tax-preparation software are informed and are updated for each tax year.
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Yes, long-term care premium payments may be tax deductible. It depends on the tax status of the individual or business entity filing an IRS tax report.
The IRS annually publishes the limits on the amount of premium that can be entered into the tax return and where to enter that amount for consideration of tax deductibility. For non-business consideration, that would currently be "Medical expenses" in Schedule A. If by adding the allowable portion of the LTCi premium to Medical expenses causes the total amount of medical expenses to exceed the threshold (formerly 7.5% of AGI, going forward 10% of AGI), then the amount beyond that threshold may be deductible. If not, then the allowable portion of the LTCi premium would not qualify for deduction.
For business consideration, the portion of the premium allowable for possible tax deductibility is usually reported on Schedule C. At the present time, only a C-corporation may have 100% of the LTCi premium considered for deductibility.
The allowable amounts of LTCi premium for tax deductible consideration are age-based. For insured-ages 40 and under, the published allowable amount of the LTCi premium for 2013 is $360. For those ages 71 and over, the published allowable amount of the LTCi premium for 2013 is $4550. Between that minimum and maximum are various age brackets with different allowable amounts. Those amounts will be adjusted for income-tax-year 2014 and each year thereafter, under current tax law. Tax preparers, accountants, tax attorneys, and tax-preparation software are informed and are updated for each tax year.